Russ Berrie is still swinging. That's how he knows he's
successful--not because his Oakland, New Jersey, gift and novelty
firm, Russ Berrie and Co. Inc., posts more than$375 million in
annual sales. And not because he's masterminded some of the
best-selling gift items in popular memory, ranging from that little
plastic statuette from the '60s who, with his arms
outstretched, proclaimed "I love you this much!" to, more
recently, the troll doll, which enjoyed a formidable comeback in
the early '90s. With its top-rated line of baby gifts and
accessories, its nostalgic "Bears From the Past" teddy
bear series, and a menagerie of other familiar gift items, Russ
Berrie and Co. enjoys more than its share of major hits.

Berrie, 64, is understandably pleased with these
accomplishments. But it's the longevity of his 34-year-old
company that pleases him most. "There are not many companies
around today that were here in 1963," Berrie says. "In
this business, things are always changing, but we're still
around. And it's been fun every step of the way," even
though it hasn't always been easy.

In a consumer environment where entertainment tie-ins and
mammoth advertising campaigns seem to dominate, Russ Berrie and Co.
rides trends the old-fashioned way--by tracking customer interests
and responding to them. It is not an exact science. "I'm
not going to say to you that every product we've made has done
well," Berrie admits. "But batting average is really not
the question. It's making sure you get the right hits at the
right time and, of course, whether or not you win the
game."

The Early Days

Above all else, Berrie seems to love the entrepreneurial game.
His career began at age 10. A middle-class kid from the Bronx,
Berrie loved baseball--and found a way to profit from it.
"I'd go to Yankee Stadium after the games and pick up
discarded score cards," Berrie explains. "I'd clean
them up [by erasing the pencil marks and smoothing the wrinkles]
and take them back the next day and sell them for 10
cents."

Humble beginnings, yes, but he was profitable at it. In fact,
jokes Berrie, "I've been trying to match that gross profit
margin ever since."

At 11, he developed his own newspaper delivery route,
distributing his papers from a borrowed baby carriage. He did odd
jobs, worked as a delivery boy, and was even an amateur bookie for
a brief time. After high school, he attended college and did a
stint in the military. But he never had the patience to finish his
degree. "I was eager to make an honest man of myself,"
Berrie says.

His first job after college, at age 23, was selling toys for a
now-defunct Chicago toy company. Here, Berrie found his calling.
Within a year, he branched out to become a manufacturer's
representative, working for five toy and novelty firms on straight
commission.

The entrepreneurial structure of being a manufacturer's rep
suited Berrie, but in the end, it wasn't entrepreneurial
enough. "I would bring [the manufacturers] certain suggestions
as to products I thought would sell, and I was frustrated that they
didn't really show an interest," he says. "By 1963,
I'd been doing this for about seven years. I had experience,
and I knew people who could make products for me. So I continued to
work as a manufacturer's rep, but I also invested $500 in some
products and rented a converted garage." Russ Berrie and Co.
was born.

Berrie's first products were primarily basic toys and
impulse gift items such as wind-up gadgets and Indian dolls he
purchased from various manufacturers.

Early sales didn't require much extra effort. "I would
see my customers and sell them the lines I was representing. Then
I'd take out the half-dozen or so different items I had [in my
line]," Berrie recalls. With a local teenager's help,
Berrie would pack orders and type invoices in the evenings. Orders
may have only averaged between $70 and $100, but they added up:
Between August and December 1963, Berrie generated a healthy
$60,000 worth of sales.

Get The Message

Over the next two years, sales mushroomed to $250,000 in 1964
and $750,000 in 1965. By then, Berrie was ready to give up his rep
job and become a full-time enterprise, moving out of the garage and
into a tiny bedroom office in his apartment. He had a part-time
secretary, a bookkeeper, a handful of independent reps and a stable
of products with potential.

Like what? Berrie's goods were largely novelties sporting
cute messages. "We developed a product called Fuzzy Wuzzies.
They were little sheepskin characters on a wooden base, and they
said `Happy Birthday' or `I Love You,' or [a variety of
other messages]," Berrie recalls. "We also did Loving Cup
trophies that said `World's Greatest Lover' and
`World's Greatest Wife,' and so on."

Message novelties proved to be a lucrative niche in the
not-yet-liberated '60s. "They were like three-dimensional
greeting cards," says Berrie. "Only these were items you
would keep." In an era when self-expression was fairly
subdued, sweet little novelties that could convey love or
appreciation were real commodities.

As times changed, so did Berrie's messages. Although
birthday greetings and messages of love never went out of style, by
1968 Americans were ready for something a little bolder. Russ
Berrie and Co. introduced Sillisculpts, plastic message figurines
with a little more attitude. Two of the most memorable are the
"I love you this much!" statuette and another of an old
barrister crying "Sue the bastards!" "I think every
lawyer in America had one," Berrie laughs.

During the company's formative years, messages, styles and
product lines came and went. But the basic formula for success that
Berrie originally devised continued strong. He remained active in
developing and acquiring gift products with wide-ranging appeal.
And he didn't venture into extraneous areas like
manufacturing.

"I like to say that manufacturers should manufacture,
accountants should account, and salespeople should sell," says
Berrie. "We're a sales and marketing organization;
we're a product- design organization. That's what we do
best." By outsourcing its manufacturing operations, Russ
Berrie and Co. has kept itself nimble--a vital attribute in the
trend-dominated world of gifts.

Growing Organized

Managing the ebb and flow of product popularity has been key to
Russ Berrie's success. But so has managing growth. If the
'60s and early '70s were Russ Berrie's era of
establishment, the mid-'70s and '80s were the era of
expansion. Realizing that a global approach was critical to future
success, Berrie set up offices in Korea, Taiwan and Hong Kong in
1977 to help the company's product development efforts and
establish good relationships with Far East manufacturers. Russ
Berrie and Co. U.K. followed in 1979.

Domestically, Russ Berrie added regional distribution centers
across the country and set up warehouses in New Jersey and
California. The company's in-house sales force, which began
with Berrie and one full-time salesperson in 1968, numbered 600
worldwide in 1985--one year after Berrie took the company public on
the New York Stock Exchange.

With growth came wholesale changes for Berrie. The man who once
packed his own boxes and typed his own invoices found himself
heading a company with hundreds of employees and hundreds of
millions of dollars in sales. "I've had to go from being a
doer to being a manager and a leader," says Berrie. And though
he says his greatest joy now is seeing his employees excel beyond
his own abilities, Berrie admits that reaching this plateau has
been a challenge.

"When I was younger, I had a different ego," says
Berrie. "I had to prove myself to myself. But as you get
older, the ego starts to find its own place. I'm certainly
dealing better with people today than I did 34 years ago."

Talk Shows

Berrie considers the ability to read people his key business
skill--whether that means motivating his employees, negotiating
with suppliers, or zeroing in on the needs of the marketplace.
Indeed, nothing could be more critical to the company's success
than its CEO's ability to predict, gauge and follow consumer
demand.

From the beginning, Berrie understood the value of tracking
customer response. "For instance, early on we became aware
that certain messages would sell really well," he says.
"Anything that said `I love you this much!' would sell.
`Happy Birthday' or `Get Well Soon' were other good
sellers. So whenever we created new [message] products, we'd
use these basic messages. In essence, we watched the marketplace,
watched what customers were buying, watched our own product line,
and expanded on what was selling."

The same principle applies today--only the company's product
line is now so vast that the process is nearly scientific. When
your company sells 7,000 products in more than 50,000 retail
outlets, your internal sales figures alone can give you a pretty
accurate read of market trends.

Still, Berrie relies on old-fashioned fact gathering. "One
of the most important things an entrepreneur can do is get out and
talk to customers--speak to people so you can understand what's
going on in the marketplace," he says. "To this day, I go
to all the trade shows to really [tap into] the pulse of the
public. It's the only way to know the direction they're
going."

Berrie says that experience has grounded him. He's witnessed
the coming and going of so many trends that it's harder now to
surprise him. This doesn't mean he's catatonic, though.
Berrie is still capable of being amused, beguiled and carried away.
Or at least he was in the early '90s, when a stumpy character
with a gentle smile and the scariest hair ever stepped up to the
plate--and hit the ball out of the park.

A Troll Tale

Back in Berrie's manufacturing rep days, one of the
companies he represented made impish little plastic dolls called
trolls. They met with moderate success, but they weren't
successful enough to keep their manufacturer from going out of
business in the mid-'60s.

That should have been the end, but Berrie had a soft spot for
the little creatures. "I tried bringing them back in 1967 with
very minor success," Berrie says. "Then, every five, six,
seven years, I'd try bringing them back again. Finally, in
1989, the trolls showed some pretty good sell-through, so we
expanded the sales force in 1990. By the time 1992 rolled around,
we were doing $250 million just in trolls."

This was not bad for a character with no motion picture deal, no
giant ad campaign and, frankly, not much in the way of conventional
good looks. Troll mania seized the country, and Russ Berrie had a
major stake in the action. There were big trolls and small ones,
crawling troll babies, trolls in cars and troll mugs.

"It became phenomenal," says Berrie. "I could not
have predicted what happened. All I did was recognize the demand
and expand to meet it."

And what demand! Veteran that he was, even Berrie was thrilled
to see his fortunes rise higher and brighter than a troll's
coiffure. "We just got carried away," he admits. "We
were not really watching the marketplace."

Then the inevitable happened. "On April 12, 1993, at 1:32
p.m., everyone in the world decided they didn't want any more
trolls," Berrie laments. "The bottom just fell
out."

Back To Basics

Between 1992 and 1993, sales at Russ Berrie and Co. dropped more
than $165 million--from $444 million to $279 million. And it
wasn't just lost sales that hurt: The company had also lost
momentum.

Berrie was understandably disappointed with the course of
events, but he wasn't defeated. This is where experience
helped. For one thing, even in the headiest moments of troll fever,
Berrie had expanded the company conservatively. "We added a
number of salespeople and a few people in shipping and
administration, but we had been able to control growth without
overburdening the company," Berrie says. "Again, the fact
that we don't own any factories helped."

What did Berrie learn from the troll episode? Certainly, that
meteoric spikes in sales aren't all bad: Both revenues and
profits hit record levels in 1992. But knowing the fundamentals of
your business and having the good sense to return to them in times
of crisis is the surest recipe for longevity.

"It isn't that complicated," says Berrie.
"You need to be able to take the risk, to take your best shot.
You run with the winners and bail out on the losers."

He's Got The Gift

Thirty-four years ago, Russ Berrie put together a little
collection of products and took it to stores to see what might
sell. He kept the winners, ditched the losers, and then he
regrouped. Thirty-four years and billions of dollars later,
he's still at it.

But Berrie just keeps swinging. Though he tries to spend as much
time as possible with his six children and his wife, Angelica, he
usually works seven days a week. "I take time off on Sundays
to watch the Giants lose," he says. But work is his major
source of fun. And Berrie wants to keep playing.

"I hope when I'm 92 years old, I'll be on the floor
of the Jacob Javits Convention Center doing a trade show and
writing orders for customers," Berrie says. As long as
there's a market, Russ Berrie will have the gift.

Russ Berrie

BUSINESS PHILOSOPHY:"Running a business is not
just products and pricing; it's the whole gamut of human
experience. You have to motivate people all the time, and you have
to understand what their needs are, whether they be customers or
employees or suppliers."